Insurance Board to introduce third party administrator

Kathmandu, June 24: The Insurance Board (IB) is making preparations to introduce third party administrators in the health insurance sector.

According to the Board, the third party will develop software required for the cashless health insurance administration, and run the insurance business in collaboration with the insurance companies and hospitals across the country.

“This will revolutionize the health insurance in the country as the third party will manage the overall insurance system through information technology management that would integrate the insurers, hospitals and the company. Insured people will receive swift and quality service once the new system is implemented,” said IB chairman Chiranjibi Chapagain.

He said that the insurance sector regulator was mulling to implement card system where every insured individual would be assigned a card to avail the health facilities at the listed hospitals or health institutions.

The third party will implement all types of health insurance. 

The IB might also take charge of the micro health insurance, which is being implemented by the government, following the implementation of the new system.

The government has implemented the micro health insurance in 25 districts, and planning to expand it to many other districts in the next fiscal year 2017/18.

However, the board maintained that it wouldn’t ask the government for handing over the management of the micro health insurance until the infrastructure was built.

“The IB has already prepared directives required for the implementation of the third party administrator. It may take a year to manage the necessary infrastructure and administrative management,” said Chapagain.

But, the IB has to wait till the Insurance Act is approved by the parliament because the prevailing Insurance Act, 1993 does not have the provision to issue license of the third party administrator.

As per this, the insurance sector regulator can issue licenses to insurance companies, brokers and surveyors.

The draft of the new Act is prepared and the Ministry of Finance has sent it to the Ministry of Law for the review.

The IB said that the new system would help in transferring technology.

“There is no such company in Nepal that can work as the third party manager by implementing their own technology. Therefore, the foreign companies will bring in new technology which, as the Board believes, may improve the way of doing insurance business,” said Chapagain.

He said that there wouldn’t be the monopoly of third party administrator as the licenses would be issued to multiple companies.